We would like to sell our home and have enough money "leftover" to buy another. Yet with the commission rate locally included in the price we are asking to much for the house and there isn't much wiggle room to work with prospective buyers.
A: I guess the first question to address is how much it really costs to sell your house. Commission rates in Utah are typically 6%, you pay an additional 1% for sellers title, and up to 3.5% (3% is typical) in seller paid buyers closing costs. A few other costs may have your head spinning when a buyer’s asks for a home warranty or repairs.
Let's dive into these percentages even more and figure out where all the money actually goes. The 6% agent commissions are broke down like this. The listing agent gets half 3% and the buyer’s agent gets the other half 3%. Then with our 3%, the money gets split like this 1/3 goes to the brokerage that we work for, 1/3 goes to Uncle Sam, and the last 1/3 gets split between expenses like: gas, advertising, printing expenses, open house costs, and finally our monthly bills.
Next are seller’s title fees. There are so many different ways to count your chickens when it comes to pricing out title cost, that being said every time I have a client that wants me to breakdown and find out who is the best price. It comes down to about $65 difference across the board. The government regulates these guys so heavily that you should pick a title person that is good at what they do, who loves there job and has a lot of experience.
Now we get into what I think is the best place to negotiate and save money. Sellers paid buyers closing costs. Yes it is exactly what you think it is. You are paying for the buyers title and there mortgage initiation fees. Why would you do this you ask, because the buyer didn't want to spend the time or efforts to save money? I love negotiating this on both sides it really fires me up to help my client out. Can you get 5, 6, or even $7,000 free money for your buyer? Yes. Does the seller have to pay for the buyers closing cost? No. It's a win lose situation. When I have a seller that is on the cusp of short sale or going to need to bring money to the table, I always tell the buyer’s agent, sellers permitting, that there is no money for repairs or closing cost. If the buyer needs them that bad, then the buyer’s agent needs to stack them on top of the purchase price. This makes it a win win. Buyer gets the money they need for closing cost; and seller doesn’t have to forfeit their equity.
Last point repairs and home warranties. With the exception of the repairs that come back on the appraisal. I think this is a good place to save some money. It’s like the icing on the cake for a buyer. It’s not really needed for the cupcake to be good. Just don’t agree to it.
All that being said I think that there are a lot of different places to save money. I always worry about agents that are willing to take a smaller commission, what the seller is missing out on? Are you really going to get top rate service? Is the agent going to negotiate the best price for you, or are they going to just get the job done. I always recommend sellers to do their homework before they choose an agent. You should ask yourself do you have similar morals, values, and expectations. What are the services that the agent is going to provide? How long are does it normally take in this market for a house to sell? How is the best time and form of communication? Is the agent a full time agent or do they have a day job and sell real estate on the side? Does there schedule and your schedule match up?
Is what I’m trying to say is do your homework; a lot of time you pay for what you get. We as agents for the most part are human can compromise and want the best for everyone. I personally access commissions on a case by case base. So, the answer is yes. Try and come to a good compromise with the agent if they are taking a discount. Offer to schedule your own showing appointments, buy refreshment’s or bake cookies for the open house, the best thing you could offer is using them as your agent when you purchase a new home, or help them with referring your friends and family.
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